We analyze the channels by which an ill-functioning labor market
changes the preferences of the people for public policy and
therefore the decisions that are made. We not only discuss
labour market reform but other important aspects of policy
making such as the size and structure of government spending. The
class of mechanisms that we highlight can be summarized as the
very existence of unemployment generating political support for
"sclerosis". This may help to explain the timid pace of reform,
in particular the fact that any recovery sends them at the
backfront of the political agenda, and the sometimes violent
opposition generated by some measures, as we have seen mostly in
France.